FS weekly highlights—26 March 2020

FS weekly highlights—26 March 2020

In this issue

 

 

Coronavirus (COVID-19)
Brexit news
MiFID II
UK, EU and international regulators and bodies
Prudential requirements
Financial stability, recovery and resolution
Consumer protection
Financial crime
Complaints, compensation and claims management
Investigations, enforcement and discipline
Markets and trading
Regulation of capital markets
Regulation of derivatives
Investment funds and asset management
Securities financing transactions
Banks and mutuals
Consumer credit, mortgage and home finance
Regulation of insurance
Payment services and systems
Fintech and cryptoassets
Sustainable finance
Islamic finance
Dates for your diary

 

Coronavirus (COVID-19)

ESMA and the EBA issue statements on the accounting implications of coronavirus (COVID-19) economic support

The European Securities and Markets Authority (ESMA) issued a public statement on some accounting implications of the economic support and relief measures adopted by EU Member States in response to the coronavirus (COVID-19) outbreak. The measures include moratoria on repayment of loans and have an impact on the calculation of expected credit losses in accordance with IFRS 9. The European Banking Authority (EBA) also issued a related statement which explains a number of interpretative aspects on the functioning of the application of the prudential framework regarding the classification of loans in default, forbearance and IFRS9 in light of coronavirus measures. The two statements are consistent as regards financial reporting.

Sources: ESMA issues guidance on accounting implications of COVID-19EBA provides clarity to banks and consumers on the application of the prudential framework in light of COVID-19 measures and  EBA statement on the application of the prudential framework regarding default, forbearance and IFRS9 in light of COVID-19 measures

ESMA statement on MiFID II call taping requirements and coronavirus (COVID-19)

ESMA issued a public statement to clarify the application by firms of MiFID II requirements on the recording of telephone conversations in the exceptional circumstances created by the coronavirus (COVID-19) outbreak.

Source: ESMA clarifies position on call taping under MiFID II.

ESMA statement on MiFIR tick-size regime for systematic internalisers—coronavirus (COVID-19)

ESMA issued a public statement to ensure co-ordinated supervisory actions by national competent authorities (NCAs) on the application of the new tick-size regime for systematic internalisers under MiFIR and the Investment Firms Regulation. ESMA says this approach is needed in response to developments related to the coronavirus (COVID-19) pandemic and the related actions taken by EU Member States.

Source: ESMA sets out approach on MiFIR tick-size regime for systematic internalisers.

For further information on the tick-size regime for systematic internalisers under MiFIR, see:  Systematic internalisers.

FCA confirms supervisory approach for new tick-size regime in light of coronavirus (COVID-19)

The Financial Conduct Authority (FCA) updated its coronavirus (COVID-19) information for firms, to confirm its support for ESMA’s recent statement on its approach to supervising the new tick-size regime for systematic internalisers under MiFIR and the Investment Firms Regulation (EU) 2019/2033 (IFR). The FCA says it supports ESMA’s approach and, like ESMA, it will not prioritise supervision of the new requirements at this time.

Source: FCA webpage update: COVID-19: Approach to supervising MiFIR tick-size regime for systematic internalisers.

ESMA statement on SFTR implementation

ESMA issued a public statement requesting a co-ordinated supervisory approach by national competent authorities (NCAs) to the application of the Securities Finance Transactions Regulation (EU) 2015/2365 (SFTR), including on reporting start date and registration of trade repositories (TRs). This request has been made in response to the coronavirus (COVID-19) pandemic.

Source: ESMA sets out approach to SFTR implementation.

For further information on the SFTR, see:  Securities Financing Transactions Regulation (SFTR)—essentials.

FCA updates SFTR regulatory approach in light of coronavirus (COVID-19) pandemic

The FCA updated its webpage on the SFTR to confirm its approach to supervisory reporting in the light of the coronavirus (COVID-19) pandemic.

Source: FCA updates SFTR regulatory approach in light of COVID-19 pandemic.

EBA issues statement on consumer and payment issues and the implications of coronavirus (COVID-19)

The EBA issued a statement on consumer and payment issues and the implications of coronavirus (COVID-19). The EBA reminds financial institutions of their consumer protection obligations, temporarily lifts some reporting obligations for payment service providers (PSPs), and calls on PSPs to raise their contactless payment thresholds to the legal limit.

Source: EBA statement on consumer and payment issues in light of COVID-19.

ESMA SMSG publishes own initiative report on measures relating to the coronavirus (COVID-19) crisis

ESMA’s Securities and Markets Stakeholder Group (SMSG) published an own initiative report concerning the coronavirus (COVID-19) crisis, setting out numerous proposed measures to allow stakeholders to funnel as many resources as possible towards coping with the current crisis, to preserve a level playing field and to ensure easy access and full transparency.

Source: SMSG own initiative report on measures relating to the COVID-19 crisis.

HMT, BoE and FCA jointly write to banks on coronavirus (COVID-19) and bank lending

The chancellor of the exchequer, Rishi Sunak, the governor of the Bank of England (BoE), Andrew Bailey, and the CEO of the FCA, Chris Woolard, have written to the CEOs of UK banks on the subject of the coronavirus (COVID-19) and bank lending. The letter reminds firms of the critical role they will play in the UK response to the pandemic, and the steps government, the BoE and the FCA are taking.

Source: COVID 19 and bank lending—Joint letter to the UK banks from HM Treasury, the Bank of England, and the FCA.

FCA guidance on defining ‘key workers’ in financial services

The FCA set out the steps firms should take to help identify key workers in financial services. Schools are being asked to continue to provide care for a limited number of children whose parents are critical to the coronavirus (COVID-19) response and cannot be safely cared for at home. This includes parents who work in financial services and are needed for the provision of essential financial services.

Source: Key workers in financial services.

BoE announces coronavirus (COVID-19) supervisory and prudential policy measures, including cancelling the 2020 annual stress test

The BoE announced supervisory and prudential policy measures to address the challenges of coronavirus (COVID-19), including cancellation of BoE’s 2020 annual stress test—the annual cyclical scenario; postponement of the joint BoE/FCA survey into open-ended funds; amendments to the biennial exploratory scenario (BES) timetable; a statement on the potential interaction of COVID-19 with IFRS9; and a number of other steps to reduce regulatory burdens involved during current events.

Sources: Bank of England announces supervisory and prudential policy measures to address the challenges of COVID-19 and  UK Finance responds to Bank of England measures to address impact of COVID-19.

ECB Banking Supervision provides further supervisory flexibility to banks in reaction to coronavirus (COVID-19)

The European Central Bank (ECB) announced further measures to ensure that its directly supervised banks can continue to fulfil their role to fund households and corporations amid the coronavirus (COVID-19)-related economic shock to the global economy.

Source: ECB Banking Supervision provides further flexibility to banks in reaction to coronavirus.

EIOPA issues recommendations on supervisory flexibility regarding deadlines of supervisory reporting and public disclosure by insurers

The European Insurance and Occupational Pensions Authority (EIOPA) issued recommendations addressed to national competent authorities on supervisory flexibility regarding the deadline of supervisory reporting and public disclosure in light of the coronavirus (COVID-19) pandemic.

Source: EIOPA issues recommendations on supervisory flexibility regarding deadlines of supervisory reporting and public disclosure by insurers.

Coronavirus (COVID-19): PRA announces extension to reporting windows

The Prudential Regulation Authority (PRA) issued a statement outlining its approach to regulatory reporting for UK insurers in response to the coronavirus (COVID-19) pandemic and EIOPA’s ‘Recommendations on supervisory flexibility regarding the deadline of supervisory reporting and public disclosures—coronavirus/COVID-19’, published on 20 March 2020.

Source: COVID-19 regulatory reporting amendments.

Delivery of FSA/FCA interest rate hedging products review delayed

John Swift QC, the independent reviewer examining the Financial Services Authority (FSA) and FCA's supervisory intervention in relation to interest rate hedging products, has informed the FCA that the deadline for submission of his report must be extended until early 2021 as a result of necessary precautions to be taken in response to the coronavirus (COVID-19) virus.

Source: FSA/FCA Interest Rate Hedging Products Lessons Learned Review deadline extended until early 2021.

ESMA extends consultations response dates

ESMA decided to extend the response date for all ongoing consultations with a closing date on or after 16 March by four weeks, in light of the coronavirus (COVID-19) pandemic.

Source: ESMA extends consultations response dates.

EBA issues statement on postponed activities in light of coronavirus (COVID-19)

The EBA issued a statement setting out the activities it has decided to postpone due to the coronavirus (COVID-19) pandemic. The postponements are intended to further support banks’ focus on key operations, after the EBA issued statements providing clarity to banks and consumers on the application of the prudential framework, and on consumer and payment issues, in light of coronavius.

Source: Postponed EBA activities—COVID 19.

FCA statement on the impact of coronavirus (COVID-19) on firms’ LIBOR transition plans

The FCA, the BoE and members of the Working Group on Sterling Risk-Free Reference Rates have discussed the impact of the coronavirus (COVID-19) on firms’ LIBOR transition plans over the coming months. An FCA statement says the central assumption that firms cannot rely on LIBOR being published after the end of 2021 has not changed and should remain the target date for all firms to meet.

Source: Impact of the coronavirus on firms’ LIBOR transition plans.

Market trade associations say US financial markets should be kept open during coronavirus (COVID-19) health crisis

Eighteen market trade associations, including the International Swaps and Derivatives Association (ISDA) and the Futures Industry Association (FIA), wrote to the US Treasury, the Federal Reserve Board of Governors, the Securities and Exchange Commission and the Commodity Futures Trading Commission, to emphasise the importance of keeping US financial markets open during the coronavirus (COVID-19) health crisis.

Source: FIA joins trade associations and businesses to urge Trump Administration and Federal officials to keep markets open.

New York Stock Exchange announces temporary move to electronic-only trading in face of coronavirus (COVID-19)

Intercontinental Exchange (ICE) announced that the New York Stock Exchange (NYSE) will initiate its business continuity plan and move, on a temporary basis, to fully electronic trading on Monday 23 March 2020. Trading and regulatory oversight of all NYSE-listed securities will continue without interruption. The decision to temporarily close the trading floors is ‘a precautionary step to protect the health and well-being of employees and the floor community in response to COVID-19’.

Source: New York Stock Exchange to move temporarily to fully electronic trading.

FCA says UK markets continuing to operate in ‘orderly fashion’ despite coronavirus (COVID-19) impacts

The FCA issued a statement on UK markets, in which it confirms that it is working with international counterparts in the US, the EU and elsewhere so that markets can remain open and orderly and continue to perform their ‘essential role’ in supporting businesses, governments, jobs and the broader economy. It says that, although the impacts of coronavirus (COVID-19) have caused significant volatility in market prices over the past weeks and this may continue for a period, markets have continued to operate in an ‘orderly fashion’ in the UK.

Source: Statement on UK markets.

Coronavirus (COVID-19): Industry bodies say financial markets should stay open ‘if at all possible’

ISDA wrote to the International Organization of Securities Commissions (IOSCO) and the Financial Stability Board (FSB) saying, ‘if at all possible’, it is essential that markets remain open to ensure critical payments and transactions can be fulfilled and capital can flow during the coronavirus (COVID-19) pandemic. A number of insurance organisations, together with the Association for Financial Markets in Europe (AFME) and the World Federation of Exchanges (WFE), have written a similar letter to European leaders emphasising the importance of keeping the European financial markets open ‘during this extraordinary time’.

Source: Re: Maintaining market access during jurisdictional responses to the corona virus.

Coronavirus (COVID-19): Short selling announcements by the FCA

The FCA published a dedicated webpage on short selling restrictions, in which it draws the industry’s attention to the temporary bans under Article 20(2)(b) of the Short Selling Regulation on net short positions in shares listed and admitted to trading on trading venues in France, Italy and Spain. These bans have been approved by the ESMA and were introduced in response to the coronavirus (COVID-19) pandemic.

Sources: Short selling restrictions and prohibitions and FCA statement on short selling bans and reporting.

Short selling bans in Belgium and Greece

ESMA issued positive opinions on bans on net short positions on stocks admitted to trading on Belgian and Greek trading venues, as well as to all related instruments relevant for the calculation of net short positions. The bans will be effective on 18 March 2020 (before the opening of the trading session) and will end in Belgium on 17 April 2020 (after the trading session is closed) and in Greece on 24 April 2020 at 24:00:00.

Source: ESMA issues positive opinions on bans on net short positions by Belgian FSMA and Greek HCMC.

FCA highlights Austrian short-selling ban

The FCA highlighted the announcement by the Austrian Financial Market Authority (Austrian FMA) which restricts transactions under Article 20 of the Short Selling Regulation. This measure is effective immediately until the end of the day on 18 April 2020.

Source: Temporary ban on net short positions by Austrian FMA.

ESMA deems Austrian short selling ban ‘necessary’

ESMA published an opinion, dated 23 March 2020, on an emergency measure proposed by the Austrian Finanzmarktaufsicht (FMA) under Section 1 of Chapter V of the Short Selling Regulation. The measure was proposed in light of the coronavirus (COVID-19) pandemic and runs from 18 March 2020 to 18 April 2020 (unless lifted before the deadline or extended).

Source: Opinion of the European Securities and Markets Authority of 23 March 2020 on a proposed emergency measure by the Austrian Finanzmarktaufsicht under Section 1 of Chapter V of Regulation (EU) No 236/2012.

WFE outlines action being taken to calm COVID-19 market volatility

The WFE issued a statement on the coronavirus (COVID-19) and market volatility. It notes that the economic impact of the pandemic has introduced extraordinary volatility in global financial markets, comparable with the financial crisis of 2008, and with one-day losses not seen since 1987. The WFE says the situation is made more challenging by high levels of indebtedness and already low interest rates. As the global representative body of exchanges and central counterparties (CCPs), the WFE is working with members to share best practice, mitigate risk, and co-ordinate responses (where permitted by antitrust laws).

Source: The World Federation of Exchanges issues statement on Covid-19 and market volatility.

Treasury Committee seeks views on the government's coronavirus (COVID-19) financial package

Following an evidence session with the chancellor of the exchequer, Rishi Sunak, the Treasury Committee issued a call for evidence on the government's coronavirus (COVID-19) financial package. The Committee is seeking a range of views from stakeholders on whether the government's response to the coronavirus is sufficient, and suggestions on areas where more support is needed. It has asked for this initial tranche of evidence to be submitted by 5pm on 23 March 2020.

Source: Treasury Committee issues call for evidence on government's coronavirus financial package.

FPC reviews actions taken to help UK firms’ cash flow through the coronavirus (COVID-19) pandemic

The BoE published a summary and report of the Financial Policy Committee’s (FPC) March 2020 meetings, which were dominated by the outbreak and spread of coronavirus (COVID-19).

Source: Financial policy summary and record—March 2020.

FSB and BCBS provide updates on financial sector co-ordination in response to coronavirus (COVID-19)

The FSB and the Basel Committee on Banking Supervision (BCBS) published press releases setting out the co-ordinating activities the organisations are carrying out in response to the coronavirus (COVID-19) pandemic.

Sources: FSB co-ordinates financial sector work to buttress the economy in response to COVID-19 and  Basel Committee co-ordinates policy and supervisory response to COVID-19.

ICMA makes its Euro commercial paper materials available to non-members

The International Capital Market Association (ICMA) made generally available to non-ICMA members the Euro commercial paper (ECP) materials from its Primary Market Handbook, which were previously available only to ICMA members. ICMA says it has decided to do this ‘in the interest of supporting the overall market’, after the BoE announced its new COVID Corporate Financing Facility (CCFF).

Source: ICMA Euro commercial paper (ECP) materials to be made available to the wider market.

Coronavirus (COVID-19)—FCA sets out expectations for general insurance firms

The FCA set out its expectations for general insurance firms and provided information for consumers about what they should see from their insurance provider during the coronavirus (COVID-19) pandemic.

Sources: Insurance and coronavirus (Covid-19)—our expectations of firms​Insurance and coronavirus (Covid-19)—information for consumers and ABI responds to new FCA guidance on insurance during Coronavirus.

EIOPA issues statement on coronavirus (COVID-19) and the EU insurance sector

EIOPA issued a statement on its actions to mitigate the impact of coronavirus (COVID-19) on the EU insurance sector. EIOPA notes that insurers are likely to face progressively difficult conditions in the immediate future, both in terms of navigating challenging market conditions and in maintaining operations, while taking steps to protect employees and customers. The statement sets out guidance for firms and EIOPA’s response.

Source: EIOPA statement on actions to mitigate the impact of coronavirus/COVID-19 on the EU insurance sector.

UK banks ‘ready and willing’ to help businesses and households bridge through the coronavirus (COVID-19) pandemic

The BoE issued a joint statement with major UK banks on measures to help businesses and households bridge through the coronavirus (COVID-19) pandemic. The statement says the UK’s banks are in a strong position to provide further support to the economy and are ‘ready and willing to do so’.

Source: A joint statement by UK banks and the Bank of England on COVID-19.

PSR update on implementation of Confirmation of Payee: coronavirus (COVID-19)

The Payment Systems Regulator (PSR) set out information for directed banks in the event that they are unable to fully implement Confirmation of Payee (CoP) by 31 March 2020.

Source: An update on the implementation of Confirmation of Payee.

New guidance for mortgage providers and lenders taking part in the Coronavirus Business Interruption Loan Scheme

The FCA published new guidance for mortgage lenders and administrators, and small business lenders taking part in the Coronavirus Business Interruption Loan Scheme.

Source: FCA sets out new guidance for mortgage providers and for lenders taking part in the Coronavirus Business Interruption Loan Scheme.

FCA and PRA urge banks and buildings societies to keep branches open

The FCA and the PRA issued statements advising banks and building societies to keep their branches and contact centres open, where possible, as they are deemed essential for civil and commercial functions. The statements follow updated government guidance published on 23 March 2020, which directed businesses and premises to remain closed as part of further social distancing measures introduced to deal with the coronavirus (COVID-19) pandemic.

Source: Statement on bank branch opening.

FCA asks companies to delay announcement of preliminary financial accounts

The FCA asked listed companies to delay the forthcoming announcement of their preliminary financial accounts by at least two weeks. The request does not apply to AIM companies.

Source: FCA requests a delay to the forthcoming announcement of preliminary financial accounts.

Coronavirus (COVID-19) outbreak—contactless card payments limit to rise to £45

UK Finance announced that the spending limit for contactless card payments will be increased from £30 to £45, with a national roll-out beginning from 1 April 2020. The changes were already under consideration by the industry, but the process has been expedited as part of the industry’s response to the coronavirus (COVID-19) outbreak.

Source: Contactless limit in UK to be increased to £45.

FCA updates webpage on coronavirus (COVID-19) advice for consumers

The FCA published consumer-facing advice on protecting personal finances during the coronavirus (COVID-19) pandemic, as well as setting out precautions the FCA is taking. The FCA says it is in regular contact with firms to assess their preparedness and expects them to be looking at their business continuity plans. It also stresses that firms must treat customers fairly and consider the needs of those potentially affected by the impact of the pandemic.

Source: Coronavirus (COVID-19): Support for consumers.

Coronavirus (COVID-19)—Courts and Tribunals Judiciary launches pilot Practice Direction

The Courts and Tribunals Judiciary published a Practice Direction, which considers how tribunals may need to adjust their ways of working to limit the spread of coronavirus (COVID-19). It will be piloted for an initial six-month period and can be reviewed or revoked if it becomes unnecessary.

Source: Pilot Practice Direction—Contingency Arrangements in the First-Tier Tribunal and the Upper Tribunal.

Coronavirus (COVID-19)—Lloyd's of London announces closure

Lloyd's of London announced that Lloyd's Underwriting Room in London will be closed with effect from 4pm on 19 March 2020, in line with UK Government's advice to avoid all non-essential contact to avoid the spread of coronavirus (COVID-19). Following the resilience test on 13 March 2020, Lloyd's has advised it is confident that the emergency trading protocols will enable the market to continue trading during the closure. This will be reviewed on a weekly basis.

Source: Coronavirus updates hub.

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Brexit news

Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc, and Transitional Provision) (EU Exit) Regulations 2020

SI 2020/Draft: This draft enactment is laid in exercise of legislative powers under the European Union (Withdrawal) Act 2018 in preparation for IP completion day. This draft enactment is proposed to amend UK primary legislation, 13 pieces of UK subordinate legislation and one piece of retained EU legislation in relation to over the counter derivatives, central counterparties and trade repositories in order to address failures of retained EU law to operate effectively and other deficiencies arising from the withdrawal of the UK from the EU. It comes into force partly on the day after the day on which these Regulations are made and fully on IP completion day.

Source: Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc, and Transitional Provision) (EU Exit) Regulations 2020 and  explanatory memorandum.

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MiFID II

ESMA statement on MiFID II call taping requirements and coronavirus (COVID-19)

The ESMA issued a public statement to clarify the application by firms of MiFID II requirements on the recording of telephone conversations in the exceptional circumstances created by the coronavirus (COVID-19) outbreak.

Source: ESMA clarifies position on call taping under MiFID II.

ESMA statement on MiFIR tick-size regime for systematic internalisers—coronavirus (COVID-19)

ESMA issued a public statement to ensure co-ordinated supervisory actions by NCAs on the application of the new tick-size regime for systematic internalisers under MiFIR and the IFR. ESMA says this approach is needed in response to developments related to the coronavirus (COVID-19) pandemic and the related actions taken by EU Member States.

Source: ESMA sets out approach on MiFIR tick-size regime for systematic internalisers.

For further information on the tick-size regime for systematic internalisers under MiFIR, see:  Systematic internalisers.

FCA confirms supervisory approach for new tick-size regime in light of coronavirus (COVID-19)

The FCA updated its coronavirus (COVID-19) information for firms, to confirm its support for ESMA’s recent statement on its approach to supervising the new tick-size regime for systematic internalisers under the MiFIR and the IFR. The FCA says it supports ESMA’s approach and, like ESMA, it will not prioritise supervision of the new requirements at this time.

Source: FCA webpage update: COVID-19: Approach to supervising MiFIR tick-size regime for systematic internalisers.

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UK, EU and international regulators and bodies

ECB publishes 2019 annual report

The ECB published its 2019 annual report, setting out how it has carried out its supervisory tasks. In the foreword to the report, the ECB president, Christine Lagarde, notes that in the short space of time since the ECB became the European banking supervisor in 2014, European banking supervision has developed from a start-up to a more mature institution, well established as a rigorous and consistent authority.

Source: ECB annual report.

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Prudential requirements

ESMA and the EBA issue statements on the accounting implications of coronavirus (COVID-19) economic support

ESMA issued a public statement on some accounting implications of the economic support and relief measures adopted by EU Member States in response to the coronavirus (COVID-19) outbreak. The measures include moratoria on repayment of loans and have an impact on the calculation of expected credit losses in accordance with IFRS 9. The EBA issued a related statement which explains a number of interpretative aspects on the functioning of the application of the prudential framework regarding the classification of loans in default, forbearance and IFRS9 in light of COVID19 measures. The two statements are consistent as regards financial reporting.

Sources: ESMA issues guidance on accounting implications of COVID-19EBA provides clarity to banks and consumers on the application of the prudential framework in light of COVID-19 measures and  EBA statement on the application of the prudential framework regarding default, forbearance and IFRS9 in light of COVID-19 measures

BoE announces coronavirus (COVID-19) supervisory and prudential policy measures, including cancelling the 2020 annual stress test

The BoE announced supervisory and prudential policy measures to address the challenges of coronavirus (COVID-19), including cancellation of BoE’s 2020 annual stress test—the annual cyclical scenario; postponement of the joint BoE/FCA survey into open-ended funds; amendments to the biennial exploratory scenario (BES) timetable; a statement on the potential interaction of COVID-19 with IFRS9; and a number of other steps to reduce regulatory burdens involved during current events.

Sources: Bank of England announces supervisory and prudential policy measures to address the challenges of COVID-19 and  UK Finance responds to Bank of England measures to address impact of COVID-19.

ECB issues SREP methodology for LSIs—2020 edition

The ECB published ‘SSM LSI SREP Methodology—2020 edition’, which provides an update to its 2018 edition. The publication sets out the methodology for the supervisory review and evaluation process (SREP) of less significant institutions (LSIs), developed by the ECB and NCAs. The 2020 SREP methodology has been enhanced in the areas of interest rate risk in the banking book (IRRBB) and IT risk assessment.

Source: Publication: SSM LSI SREP methodology 2020 edition.

ECON report concludes EU ‘fit and proper’ regime requires change

The European Parliament published an analysis requested by its ECON and authored by the Economic Governance Support Unit, entitled ‘Is the current “fit and proper” regime appropriate for banking union?’. The authors conclude that fit and proper assessments of management bodies are one of the least harmonised areas in EU bank supervisory law. The report considers the ’patchwork’ of existing EU rules; concludes that the differences across individual jurisdictions are striking and affect both the assessment process and the criteria used; recommends that provisions dictated by Directive 36/2013 (CRD IV) should be revisited, with a view to ensuring a more certain and homogeneous framework; and recommends that the ECB should consider updating its supervisory practices in this regard.

Source: Is the current ‘fit and proper’ regime appropriate for the banking union?

Basel Committee publishes NSFR and LEX implementation assessments

The BCBS published assessment reports on the implementation of the Net Stable Funding Ratio (NSFR) and the large exposures framework (LEX) in Hong Kong SAR, Indonesia, and Singapore. The assessments found that the NSFR and LEX regulations in each of these jurisdictions are compliant with the Basel Committee's global standards.

Source: Basel Committee assesses members' implementation of the Net Stable Funding Ratio and large exposures framework.

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Financial stability, recovery and resolution 

BoE launches Contingent Term Repo Facility in response to coronavirus (COVID-19) outbreak

The BoE launched the Contingent Term Repo Facility (CTRF)—a temporary enhancement to its sterling liquidity insurance facilities—in response to current financial market conditions. The measure aims to help alleviate frictions observed in money markets in recent weeks, both globally and domestically, as a result of the economic shock caused by the coronavirus (COVID-19) outbreak.

Sources: Bank of England launches Contingent Term Repo Facility and  Activation of the Contingent Term Repo Facility—Market Notice 24 March 2020.

ECB paper calls for deeper EMU to strengthen economic resilience

The ECB published an article on various aspects of deepening the Economic and Monetary Union (EMU). Although the authors note ‘significant progress’ over the EU’s last two legislative periods, with the response to the global financial crisis and the establishment of the banking union, they say there is ‘no room for complacency’ and argue that the EMU needs to become even more resilient to adverse economic shocks.

Source: The state of play regarding the deepening agenda for Economic and Monetary Union.

WFE outlines action being taken to calm coronavirus (COVID-19) market volatility

The WFE issued a statement on the coronavirus (COVID-19) and market volatility. It notes that the economic impact of the pandemic has introduced extraordinary volatility in global financial markets, comparable with the financial crisis of 2008, and with one-day losses not seen since 1987. The WFE says the situation is made more challenging by high levels of indebtedness and already low interest rates. As the global representative body of exchanges and central counterparties (CCPs), the WFE is working with members to share best practice, mitigate risk, and co-ordinate responses (where permitted by antitrust laws).

Source: The World Federation of Exchanges issues statement on Covid-19 and market volatility.

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Consumer protection

EBA issues statement on consumer and payment issues and the implications of coronavirus (COVID-19)

The EBA issued a statement on consumer and payment issues and the implications of coronavirus (COVID-19). The EBA reminds financial institutions of their consumer protection obligations, temporarily lifts some reporting obligations for payment service providers (PSPs), and calls on PSPs to raise their contactless payment thresholds to the legal limit.

Source: EBA statement on consumer and payment issues in light of COVID-19.

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Financial crime

JMLSG publishes draft guidance on cryptoasset exchange providers and custodian wallet providers

The Joint Money Laundering Steering Group (JMLSG) published a proposed new sectoral section in Part II of its guidance, which has been considered by the editorial panel and the board. This proposed sectoral piece considers the Money Laundering and Terrorist Financing (Amendment) Regulations 2019, which brings cryptoasset exchange providers and custodian wallet providers into scope of the Money Laundering Regulations.

Source: JMLSG today publishes a proposed new sectoral piece in Part II of its guidance.

OPBAS annual report looks at progress made by Professional Body Supervisors

The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) published ‘Anti-money laundering supervision by the legal and accountancy professional body supervisors: Progress and themes from 2019’. It provides an update on the progress of Professional Body Supervisors (PBSs) since 2019 on the eight key areas set out in the OPBAS Sourcebook. It also sets out advances made by the PBSs in information and intelligence sharing, and commentary on how OPBAS is delivering on its objectives.

Source: Anti-Money Laundering Supervision by the Legal and Accountancy Professional Body Supervisors: Progress and themes from 2019.

FATF publishes bulletin for March 2020

The Financial Action Task Force (FATF) published its Private Sector Business Bulletin for March 2020, with updates on mitigating the money-laundering and terrorist financing risks of virtual assets; combating the laundering of proceeds of the illegal wildlife trade; promoting more effective supervision; and the strategic review of the FATF Global Network assessment processes.

Source: FATF private sector business bulletin (March 2020).

FCA warns of fraudsters targeting former clients of Synergy Wealth and Westbury Private Clients

The FCA issued a warning that fraudsters may be contacting former clients of the Wales-based financial advisory firm Synergy Wealth Ltd (Synergy) and London-based investment management firm Westbury Private Clients LLP (Westbury). The FCA believes fraudsters may be offering to review individuals’ pensions and arrange a pension transfer for an inappropriately high fee.

Source: Fraudsters may be targeting former clients of Synergy Wealth and Westbury Private Clients.

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Complaints, compensation and claims management

CMA issues directions to Paymentshield after two further breaches of the Payment Protection Insurance Market Investigation Order 2011

The Competition and Markets Authority (CMA) issued Paymentshield with directions after it failed on more than one occasion to send payment protection insurance (PPI) annual reminders to its customers. It must now put in place measures so similar incidents don’t happen again. Paymentshield is refunding those affected.

Sources: Paymentshield refunds customers over £380K for PPI breaches and  Directions.

FOS announces annual award limit rise

The FCA confirmed the annual increase to the Financial Ombudsman Service (FOS) award limit. This limit is adjusted each year in line with inflation, as measured by the Consumer Prices Index (CPI). From 1 April 2020, the award limit will change to £355,000 for complaints referred to the FOS on or after 1 April 2020 about acts or omissions by firms on or after 1 April 2019. For complaints about acts or omissions by firms before 1 April 2020 and which are referred to the FOS service after that date, the limit will remain at £160,000.

Source: Annual increase to our award limits.

FSCS comments on application for judicial review of compensation for LCF customers

The Financial Services Compensation Scheme (FSCS) commented on the application which has been filed for judicial review of FSCS compensation for London Capital & Finance (LCF) customers.

Source: FSCS comments on London Capital & Finance court case.

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Investigations, enforcement and discipline

FCA publishes Further Final Notices in respect of TailorMade Independent directors

The FCA published two Further Final Notices in relation to enforcement actions for self-invested personal pensions (SIPP) advisory failings. The Further Final Notices against directors of TailorMade Independent (TMI) Robert Shaw and Lloyd Pope, impose revised penalties proportionate to that imposed by the Upper Tribunal in the closely connected disciplinary case of Alistair Rae Burns (another director of TMI). Accordingly, the penalties imposed amount to 25% of the penalties imposed by the FCA’s original Decision Notices.

Sources: FCA Further Final Notice Robert ShawFCA Further Final Notice Lloyd Pope and FCA bans and fines two individuals for pension advice failings

Independent review of Connaught Income Fund Series 1 to be delivered in May 2020

The independent reviewer into the FSA and FCA's approach to the Connaught Income Fund Series 1, Raj Parker, announced that he expects that his draft report will be delivered in early May 2020. This will be followed by the usual fact-checking and representations process, with the report being finalised in summer 2020. Subject to any legal constraints, the FCA intends to publish the report in full.

Source: Connaught Fund independent reviewer announces update on delivery of his report.

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Markets and trading

FCA statement on the impact of coronavirus (COVID-19) on firms’ LIBOR transition plans

The FCA, the BoE and members of the Working Group on Sterling Risk-Free Reference Rates have discussed the impact of the coronavirus (COVID-19) on firms’ LIBOR transition plans over the coming months. An FCA statement says the central assumption that firms cannot rely on LIBOR being published after the end of 2021 has not changed and should remain the target date for all firms to meet.

Source: Impact of the coronavirus on firms’ LIBOR transition plans.

Market trade associations say US financial markets should be kept open during coronavirus (COVID-19) health crisis

Eighteen market trade associations, including the ISDA and the FIA, wrote to the US Treasury, the Federal Reserve Board of Governors, the Securities and Exchange Commission and the Commodity Futures Trading Commission, to emphasise the importance of keeping US financial markets open during the coronavirus (COVID-19) health crisis.

Source: FIA joins trade associations and businesses to urge Trump Administration and Federal officials to keep markets open.

New York Stock Exchange announces temporary move to electronic-only trading in face of coronavirus (COVID-19)

ICE announced that the New York Stock Exchange (NYSE) will initiate its business continuity plan and move, on a temporary basis, to fully electronic trading on Monday 23 March 2020. Trading and regulatory oversight of all NYSE-listed securities will continue without interruption. The decision to temporarily close the trading floors is ‘a precautionary step to protect the health and well-being of employees and the floor community in response to COVID-19’.

Source: New York Stock Exchange to move temporarily to fully electronic trading.

European Commission publishes inception impact assessment and other information on the Benchmarks Regulation

The European Commission published provisional data in connection with its review of the Benchmarks Regulation. Feedback is sought by 15 April 2020 and the Commission’s adoption is planned for Q3 2020. An inception impact assessment (IIA) has also been published.

Source: Review of the Benchmarks Regulation.

For further information on the Benchmarks Regulation, see:  Benchmarks Regulation—essentials.

ICMA makes its Euro commercial paper materials available to non-members

The ICMA made generally available to non-ICMA members the Euro commercial paper (ECP) materials from its Primary Market Handbook, which were previously available only to ICMA members. ICMA says it has decided to do this ‘in the interest of supporting the overall market’, after the BoE announced its new coronavirus (COVID—19) Corporate Financing Facility (CCFF).

Source: ICMA Euro commercial paper (ECP) materials to be made available to the wider market.

ICMA Primary Market Handbook updated with amended and new Appendices

The ICMA updated its Primary Market Handbook with amendments to Appendix A8, A13 and A16, new Appendix A12a on product governance language and changes to references to the Prospectus Directive, the Market Abuse Directive and the EEA.

Source: Amendments to the ICMA Primary Market Handbook published.

ESMA publishes ESEF Conformance Suite

The ESMA published the ESEF Conformance Suite to facilitate implementation of the Commission Delegated Regulation (EU) 2018/815 with regard to regulatory technical standards on the specification of a single electronic reporting format (ESEF Regulation).

Source: ESMA publishes ESEF conformance suite.

FCA says UK markets continuing to operate in ‘orderly fashion’ despite coronavirus (COVID-19) impacts

The FCA issued a statement on UK markets, in which it confirms that it is working with international counterparts in the US, the EU and elsewhere so that markets can remain open and orderly and continue to perform their ‘essential role’ in supporting businesses, governments, jobs and the broader economy. It says that, although the impacts of coronavirus (COVID-19) have caused significant volatility in market prices over the past weeks and this may continue for a period, markets have continued to operate in an ‘orderly fashion’ in the UK.

Source: Statement on UK markets.

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Regulation of capital markets

Coronavirus (COVID-19): Short selling announcements by the FCA

The FCA published a dedicated webpage on short selling restrictions, in which it draws the industry’s attention to the temporary bans under Article 20(2)(b) of the Short Selling Regulation on net short positions in shares listed and admitted to trading on trading venues in France, Italy and Spain. These bans have been approved by ESMA and were introduced in response to the coronavirus (COVID-19) pandemic.

Sources: Short selling restrictions and prohibitions and FCA statement on short selling bans and reporting.

FCA highlights Austrian short-selling ban

The FCA highlighted the announcement by the Austrian Financial Market Authority (Austrian FMA) which restricts transactions under Article 20 of the Short Selling Regulation. This measure is effective immediately until the end of the day on 18 April 2020.

Source: Temporary ban on net short positions by Austrian FMA.

Short selling bans in Belgium and Greece

The ESMA issued positive opinions on bans on net short positions on stocks admitted to trading on Belgian and Greek trading venues, as well as to all related instruments relevant for the calculation of net short positions. The bans will be effective on 18 March 2020 (before the opening of the trading session) and will end in Belgium on 17 April 2020 (after the trading session is closed) and in Greece on 24 April 2020 at 24:00:00.

Source: ESMA issues positive opinions on bans on net short positions by Belgian FSMA and Greek HCMC.

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Regulation of derivatives

Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc, and Transitional Provision) (EU Exit) Regulations 2020

SI 2020/Draft: This draft enactment is laid in exercise of legislative powers under the European Union (Withdrawal) Act 2018 in preparation for IP completion day. This draft enactment is proposed to amend UK primary legislation, 13 pieces of UK subordinate legislation and one piece of retained EU legislation in relation to over the counter derivatives, central counterparties and trade repositories in order to address failures of retained EU law to operate effectively and other deficiencies arising from the withdrawal of the UK from the EU. It comes into force partly on the day after the day on which these Regulations are made and fully on IP completion day.

Source: Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc, and Transitional Provision) (EU Exit) Regulations 2020 and  explanatory memorandum.

Delivery of FSA/FCA interest rate hedging products review delayed

John Swift QC, the independent reviewer examining the FSA and FCA's supervisory intervention in relation to interest rate hedging products, has informed the FCA that the deadline for submission of his report must be extended until early 2021 as a result of necessary precautions to be taken in response to the COVID-19 virus.

Source: FSA/FCA Interest Rate Hedging Products Lessons Learned Review deadline extended until early 2021.

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Investment funds and asset management

FCA speech on open-ended funds and redemption periods

The FCA published a speech by its director of markets and wholesale policy, Edwin Schooling Latter, to members of the Investment Association. The speech covered the FCA’s ongoing work with the BoE on a potential new regulatory framework for open-ended funds investing in less liquid assets. In his speech Schooling Latter proposed a review of redemption notice periods for such funds, suggesting that certain open-ended funds may have less frequent redemptions instead of daily redemptions.

Source: Open-ended funds investing in less liquid assets.

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Securities financing transactions

ESMA statement on SFTR implementation

ESMA issued a public statement requesting a co-ordinated supervisory approach by national competent authorities (NCAs) to the application of the SFTR, including on reporting start date and registration of trade repositories (TRs). This request has been made in response to the coronavirus (COVID-19) pandemic.

Source: ESMA sets out approach to SFTR implementation.

For further information on the SFTR, see:  Securities Financing Transactions Regulation (SFTR)—essentials.

FCA updates SFTR regulatory approach in light of coronavirus (COVID-19) pandemic

The FCA updated its webpage on the SFTR to confirm its approach to supervisory reporting in the light of the coronavirus (COVID-19) pandemic.

Source: FCA updates SFTR regulatory approach in light of COVID-19 pandemic.

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Banks and mutuals

HMT, BoE and FCA jointly write to banks on coronavirus (COVID-19) and bank lending

The chancellor of the exchequer, Rishi Sunak, the governor of the BoE, Andrew Bailey, and the CEO of the FCA, Chris Woolard, have written to the CEOs of UK banks on the subject of the coronavirus (COVID-19) and bank lending. The letter reminds firms of the critical role they will play in the UK response to the pandemic, and the steps government, the BoE and the FCA are taking.

Source: COVID 19 and bank lending—Joint letter to the UK banks from HM Treasury, the Bank of England, and the FCA.

ESMA and the EBA issue statements on the accounting implications of coronavirus (COVID-19) economic support

ESMA issued a public statement on some accounting implications of the economic support and relief measures adopted by EU Member States in response to the coronavirus (COVID-19) outbreak. The measures include moratoria on repayment of loans and have an impact on the calculation of expected credit losses in accordance with IFRS 9. The EBA also issued a related statement which explains a number of interpretative aspects on the functioning of the application of the prudential framework regarding the classification of loans in default, forbearance and IFRS9 in light of coronavirus (COVID–19) measures. The two statements are consistent as regards financial reporting.

Sources: ESMA issues guidance on accounting implications of COVID-19EBA provides clarity to banks and consumers on the application of the prudential framework in light of COVID-19 measures and EBA statement on the application of the prudential framework regarding default, forbearance and IFRS9 in light of COVID-19 measures

BoE announces coronavirus (COVID-19) supervisory and prudential policy measures, including cancelling the 2020 annual stress test

The BoE announced supervisory and prudential policy measures to address the challenges of coronavirus (COVID-19), including cancellation of BoE’s 2020 annual stress test—the annual cyclical scenario; postponement of the joint BoE/FCA survey into open-ended funds; amendments to the biennial exploratory scenario (BES) timetable; a statement on the potential interaction of COVID-19 with IFRS9; and a number of other steps to reduce regulatory burdens involved during current events.

Sources: Bank of England announces supervisory and prudential policy measures to address the challenges of COVID-19 and  UK Finance responds to Bank of England measures to address impact of COVID-19.

ECB Banking Supervision provides further supervisory flexibility to banks in reaction to coronavirus (COVID-19)

The ECB announced further measures to ensure that its directly supervised banks can continue to fulfil their role to fund households and corporations amid the coronavirus (COVID-19)-related economic shock to the global economy.

Source: ECB Banking Supervision provides further flexibility to banks in reaction to coronavirus.

ECB paper calls for deeper EMU to strengthen economic resilience

The ECB published an article on various aspects of deepening the Economic and Monetary Union (EMU). Although the authors note ‘significant progress’ over the EU’s last two legislative periods, with the response to the global financial crisis and the establishment of the banking union, they say there is ‘no room for complacency’ and argue that the EMU needs to become even more resilient to adverse economic shocks.

Source: The state of play regarding the deepening agenda for Economic and Monetary Union.

FCA and PRA urge banks and buildings societies to keep branches open

The FCA and the PRA issued statements advising banks and building societies to keep their branches and contact centres open, where possible, as they are deemed essential for civil and commercial functions. The statements follow updated government guidance published on 23 March 2020, which directed businesses and premises to remain closed as part of further social distancing measures introduced to deal with the coronavirus (COVID-19) pandemic.

Source: Statement on bank branch opening.

UNEP FI says 171 banks globally have signed Principles for Responsible Banking

The United Nations Environment Programme Finance Initiative (UNEP FI) published an update on its Principles for Responsible Banking, announcing that a total of 171 banks from around the world have now signed the principles and confirmed their commitment to aligning their business strategies with the goals of the Paris Agreement on Climate Change and the Sustainable Development Goals. The Principles were launched in September 2019 with 130 founding signatories.

Source: Principles for Responsible Banking update: 171 banks worldwide have now committed to align their business strategies with society’s goals.

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Consumer credit, mortgage and home finance

New guidance for mortgage providers and lenders taking part in the Coronavirus Business Interruption Loan Scheme

The FCA published new guidance for mortgage lenders and administrators, and small business lenders taking part in the Coronavirus Business Interruption Loan Scheme.

Source: FCA sets out new guidance for mortgage providers and for lenders taking part in the Coronavirus Business Interruption Loan Scheme.

EBA report warns of risks of growth in consumer bank lending

The EBA published a thematic note on consumer lending in the EU banking sector, assessing in detail supervisory data available in order to identify potential vulnerabilities for the banks and financial system that may arise from these exposures. The data show that banks are aggressively extending credit to consumers and that consumer lending is growing faster than any other lending segment.

Source: Consumer lending in the EU banking sector.

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Regulation of insurance

Civil Liability (Information Requirements) and Risk Transformation (Amendment) Regulations 2020

SI 2020/344: Provisions are made to set out what kind of information is required and the level of authentication required, as well as how and when it should be provided to the Financial Conduct Authority (‘the FCA’) to allow the Government to assess whether cost savings made by insurers from the reforms under Civil Liability Act 2018 have been passed onto consumers. These Regulations come into force partly on 24 March 2020 and fully on 1 April 2020. (Updated from draft on 25 March 2020.)

Source: Civil Liability (Information Requirements) and Risk Transformation (Amendment) Regulations 2020 and  the explanatory memorandum.

Coronavirus (COVID-19)—FCA sets out expectations for general insurance firms

The FCA set out its expectations for general insurance firms and provided information for consumers about what they should see from their insurance provider during the coronavirus (COVID-19) pandemic.

Sources: Insurance and coronavirus (Covid-19)—our expectations of firms​Insurance and coronavirus (Covid-19)—information for consumers and ABI responds to new FCA guidance on insurance during Coronavirus.

EIOPA issues recommendations on supervisory flexibility regarding deadlines of supervisory reporting and public disclosure by insurers

EIOPA issued recommendations addressed to national competent authorities on supervisory flexibility regarding the deadline of supervisory reporting and public disclosure in light of the coronavirus (COVID-19) pandemic.

Source: EIOPA issues recommendations on supervisory flexibility regarding deadlines of supervisory reporting and public disclosure by insurers.

EIOPA issues statement on coronavirus (COVID-19) and the EU insurance sector

EIOPA issued a statement on its actions to mitigate the impact of coronavirus (COVID-19) on the EU insurance sector. EIOPA notes that insurers are likely to face progressively difficult conditions in the immediate future, both in terms of navigating challenging market conditions and in maintaining operations, while taking steps to protect employees and customers. The statement sets out guidance for firms and EIOPA’s response.

Source: EIOPA statement on actions to mitigate the impact of coronavirus/COVID-19 on the EU insurance sector.

Big data analytics in insurance: IAIS paper warns of unintended risks

The IAIS published an issues paper on the use of big data analytics in insurance. While noting that the increasing digitisation of insurance provides ‘tremendous opportunities’ for the sector, the paper warns that rapid innovation could unintentionally create risks of poor outcomes for policyholders and increased vulnerabilities for the sector as a whole. Supervisors, accordingly, should remain vigilant of, and consider appropriate and proportionate responses to, such risks.

Source: IAIS publishes issues paper on the use of big data analytics in insurance 19 March 2020.

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Payment services and systems

ECB guideline repealing guideline on the data exchange for cash services published in Official Journal

Guideline (EU) 2020/428 of the European Central Bank of 5 March 2020 repealing Guideline ECB/2012/16 on the Data Exchange for Cash Services (ECB/2020/12), has been published in the Official Journal. As a result, Guideline ECB/2012/16 is repealed with effect from 1 April 2020.

Source: Guideline (EU) 2020/428 of the European Central Bank of 5 March 2020 repealing Guideline ECB/2012/16 on the Data Exchange for Cash Services (ECB/2020/12).

PSR update on implementation of Confirmation of Payee: coronavirus (COVID-19)

The PSR set out information for directed banks in the event that they are unable to fully implement Confirmation of Payee (CoP) by 31 March 2020.

Source: An update on the implementation of Confirmation of Payee.

EBA issues statement on consumer and payment issues and the implications of coronavirus (COVID-19)

The EBA issued a statement on consumer and payment issues and the implications of coronavirus (COVID-19). The EBA reminds financial institutions of their consumer protection obligations, temporarily lifts some reporting obligations for payment service providers (PSPs), and calls on PSPs to raise their contactless payment thresholds to the legal limit.

Source: EBA statement on consumer and payment issues in light of COVID-19.

Coronavirus COVID-19 outbreak—contactless card payments limit to rise to £45

UK Finance announced that the spending limit for contactless card payments will be increased from £30 to £45, with a national roll-out beginning from 1 April 2020. The changes were already under consideration by the industry, but the process has been expedited as part of the industry’s response to the coronavirus COVID-19 outbreak.

Source: Contactless limit in UK to be increased to £45.

ECB opinion welcomes Central Bank of Cyprus’s payment systems proposals

The ECB published an opinion on a draft directive of the Central Bank of Cyprus (CBC) on the operation of payment systems under its oversight, on the role and governance of payment system operators, and on the obligations of payment system participants. The main purpose of the draft directive is to enact a set of rules governing the functioning and operating methods of payment and clearing and settlement systems and of the operators of those systems.

Source: Opinion of the European Central Bank of 19 March 2020 on the oversight of payment systems and payment system operators (CON/2020/9).

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Fintech and cryptoassets

IOSCO publishes report on regulatory implications of global stablecoin initiatives

IOSCO published a report on global stablecoin initiatives, which identifies their possible implications for securities markets regulators. The report examines the regulatory issues arising from the use of global stablecoins and explores how existing IOSCO Principles and Standards could apply to these arrangements.

Source: IOSCO report examines how existing regulatory principles could apply to stablecoins.

JMLSG publishes draft guidance on cryptoasset exchange providers and custodian wallet providers

The JMLSG published a proposed new sectoral section in Part II of its guidance, which has been considered by the editorial panel and the board. This proposed sectoral piece considers the Money Laundering and Terrorist Financing (Amendment) Regulations 2019, which brings cryptoasset exchange providers and custodian wallet providers into scope of the Money Laundering Regulations.

Source: JMLSG today publishes a proposed new sectoral piece in Part II of its guidance.

WFE responses to European Commission’s consultation papers on EU regulatory framework for crypto assets and on digital operational resilience

The WFE, the global trade association for regulated exchanges and clearing houses, has published responses to two EU Commission consultation papers, namely ‘On an EU framework for markets in crypto-assets’ and ‘Digital operational resilience framework for financial services: Making the EU financial sector more secure'.

Sources: WFE response to European Commission’s consultation paper on EU regulatory framework for crypto assets and  WFE response to EU Commission’s consultation paper on digital operational resilience.

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Sustainable finance

European Commission opens feedback period for first delegated act under the Taxonomy Regulation

The European Commission opened the feedback period for an inception impact assessment of its delegated regulation on climate change mitigation and adaptation taxonomy under the Taxonomy Regulation. The delegated regulation establishes a classification of environmentally sustainable economic activities (referred to as a taxonomy) which aims to contribute substantially to the EU’s objectives on climate change adaptation and mitigation for investment purposes. The feedback period runs until 20 April 2020.

Source: Climate change mitigation and adaptation taxonomy.

UNEP FI says 171 banks globally have signed Principles for Responsible Banking

The United Nations Environment Programme Finance Initiative (UNEP FI) published an update on its Principles for Responsible Banking, announcing that a total of 171 banks from around the world have now signed the principles and confirmed their commitment to aligning their business strategies with the goals of the Paris Agreement on Climate Change and the Sustainable Development Goals. The Principles were launched in September 2019 with 130 founding signatories.

Source: Principles for Responsible Banking update: 171 banks worldwide have now committed to align their business strategies with society’s goals.

London is the leading global financial centre for green finance

TheCityUK is reporting that, according to the latest release of the Z/Yen Global Green Finance Index, London is the leading global financial centre for the quality of its green finance offering. More widely, Western Europe continues to lead the world’s centres in green finance depth and quality, taking nine of the top ten places in depth and the top 12 places in quality. This reflects the continuing work being undertaken by European financial institutions, central banks, and regulators to embed sustainability in their regulatory work.

Source: London tops the global table in quality green finance.

Indonesia and Norway join the International Platform on Sustainable Finance

The European Commission announced that Indonesia and Norway are joining the International Platform on Sustainable Finance (IPSF), which was formed in October 2019 as part of international efforts to meet the Paris environmental and climate targets. Its objective is to scale up the mobilisation of private capital towards environmentally sustainable finance at global level, and to promote integrated markets for environmentally sustainable finance.

Source: Indonesia and Norway are joining the International Platform on Sustainable Finance (IPSF).

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Islamic finance

IFSB draft standard on disclosures and transparency for Islamic insurance

The Islamic Financial Services Board (IFSB) issued the exposure draft (ED-25) of a standard on disclosures to promote transparency and market discipline for takāful/retakāful (Islamic insurance and reinsurance) undertakings. Responses are due by 25 May 2020 and comments are invited from regulatory and supervisory authorities, international organisations, institutions offering Islamic financial services (IIFS), academics and other interested parties. The standard is developed to enhance the stability and soundness of the Islamic insurance and reinsurance industry. It is intended to complement the prudential and supervisory standards issued by the International Association of Insurance Supervisors (IAIS), particularly the Insurance Core Principles (ICPs), by addressing the specificities of takāful/retakāful.

Source: The IFSB issues exposure draft of a standard on disclosures to promote transparency and market discipline for takāful/retakāful undertakings (ED 25) for public consultation

IFSB opens consultation on principles for investor protection in Islamic capital markets

The IFSB issued a new exposure draft (ED-24) for public consultation, setting out principles for investor protection in Islamic capital markets. The IFSB seeks comments from central banks, regulatory and supervisory authorities, international organisations, market players, academics and other interested parties. The consultation closes on 24 May 2020.

Source: IFSB exposure draft: Guiding principles for investor protection in Islamic capital markets (ED-24).

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Dates for your diary

 

DateSubjectEvent

 

31 March 2020

 

Financial stability, recovery and resolution

 

Deadline for the delivery of the liability reports by banks to national resolution authorities (NRAs) is 31 March 2020, in accordance with the SRB’s resolution reporting data request.

31 March 2020Payment services and systems

Deadline for responses to PSR consultation paper CP20/1 containing a proposal to vary the PSR’s Specific Direction 10 on Confirmation of Payee.

 

1 April 2020Regulation of personal pension and stakeholder products

The Pension Schemes (Disclosure of Transaction Costs and Administration Charges) (Amendment) Instrument 2020 comes into force on 1 April 2020.

 

1 April 2020Authorisation, approval and supervision

The Fees (Miscellaneous Amendments) (No 15) Instrument 2020 is to come into force on 1 April 2020, except for Part 2 of Annex B which comes into force on 31 March 2020.

 

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About the author:
Prior to joining LexisNexis in 2016 as a paralegal, Lauren was an adjudicator at the Financial Ombudsman Service. There she resolved consumers’ complaints, and gained knowledge about a wide variety of financial products. Before this she studied Law at Nottingham Trent University.